Five ways to win more business by making better bid decisions.
Some companies win more bids, tenders, and proposals than others – without handing out the proverbial brown envelope. Have you wondered what their secret is? Do they have more competent people, bigger proposal teams, better solutions, or lower price points?
What if there was no secret? What if the reason your competitors are more successful is that they make better bid decisions, respond to fewer bids, and win more? By improving your qualification process, you can make better bid decisions and win more.
Here are five ways to make better bid decisions.
It may surprise you to learn that the key to making better bid decisions is deciding WHAT NOT to pursue. This includes the industries, customers, and real opportunities to exclude from your sales pursuit strategy.
Starting early involves your overall business strategy, determining your niche and where you can fit suitably in the market. In other words, where do you deliver unique value? A meaningful pursuit strategy should also consider how you can differentiate yourself from the competition – whether in your services, pricing model or delivery system.
Once you have this direction, you can determine where to focus your resources to pursue targeted opportunities.
The fastest way to improve your win ratio is to stop bidding on things you can’t win – Tom Amrhein
There are hundreds of tenders published in South Africa every day. It might be tempting to respond to as many as possible – especially under our harsh economic circumstances. However, the desperation to win may drive the behaviour of responding to tenders outside your pursuit strategy. It makes decision-makers ignore the obvious no-bid signs.
Now is the time to be disciplined and stay true to your strategy.
Decide whether the project you are looking to bid on fits in with your company’s long-term strategy and goals. For example, are you deliberately looking to expand into new geographies or markets? Or do you want to start attracting more private – and less public – sector business.
A long shot, according to the Oxford dictionary, is an attempt that has only the slightest chance of succeeding.
Pursuing too many (or the wrong) opportunities will dilute attention and divert focus from your business and pursuit strategy. Opportunities that do not fit your strategic direction and capabilities are only long shots. If you bid on every long shot, you will waste expensive resources and lose more bids.
On the flip side, be careful not to wear blinkers when it comes to pursuing business opportunities. Just because an opportunity is not a 100% match with your criteria, it doesn’t mean you should immediately discard it.
Think outside the box and apply your qualification due diligence process to make an informed decision.
Opportunity qualification is not a once-off step. Instead, a systematic qualification process is required to decide whether to respond to a bid, with emphasis on the word “process”.
A process a series of actions or steps taken to achieve a particular end.
Revisit the decision to bid at predetermined checkpoints and consider any new information before continuing with proposal development. So much can change since your initial decision to pursue an opportunity. For example, a player might have joined the race against whom you cannot compete, the political landscape might have changed since the tender was issued, or the customer’s industry may have hit a sudden downward slump.
Make firm decisions at each checkpoint: continue or stop. These decisions are essential to business development because they stop investment in opportunities with a low probability of winning.
Well-designed qualification processes are crucial to bidding success. Without them, too many bad-fit opportunities are pursued, sapping time, energy, and money away from higher-value opportunities and initiatives.
Don’t be fooled into thinking that the deal is in the bag because an opportunity is qualified. You should still do your homework.
Dr Tom Sant, America’s foremost expert on persuasive communication and the first-ever Fellow of the APMP, suggests you ask these questions as part of your process:
- Are you the incumbent provider of the product or service being requested in this RFP?
- Is the customer happy with the incumbent’s performance?
- If the customer is unhappy with the current vendor’s performance, was the RFP issued to deal with those problems?
- Do you have a strong relationship with the customer?
- Does this RFP play into one of your strengths?
- Does the RFP appear to be slanted toward a competitor?
- Is this project or acquisition funded?
- If not, are funds available within the client’s budget?
- Is the client serious about making a decision, or is this more of an exercise in information gathering?
- Will completing this project or deliverable require heavy investments of time and money on your part?
- Would winning this contract further your own goals?
- Is this client likely to be a strong partner or reference account in the future?
- Would winning the opportunity be particularly damaging to your competitors?
- Are there strong political considerations affecting your decision to bid?
- Having answers to the above questions goes a long way to making better bid decisions.
When all the signs are that you should not respond and instead move on to something else, stick to your decision. Know when to say no. Some bids are not a good fit, and you need to see them coming. Instead, steer clear and move on to proposals with a better chance of a win.
However, you don’t want to bite the proverbial hand that could one day feed you, so tread carefully in how you turn down the bid.
The most professional approach is to get straight to the point but in a tactful manner. Spend the time needed to communicate the reasons honestly and adequately – be very specific. Not only state the reasons why you will not submit a proposal but, above all, substantiate them carefully and thoroughly.
Valid reasons for declining a bid may include fit, area of expertise, budget, time, and resources that are not right to meet the bid requirements.
The more specific, exhaustive, and valid the reasons for not submitting a proposal are, the better your chances to:
- still be considered as a service provider in future
- get back easily to your contact should a new opportunity arise
- be remembered as a professional, knowledgeable, dependable, courteous, and honest perspective provider
- above all, win new business, eventually.
In conclusion, hope is a terrible sales strategy. When making decisions about pursuing opportunities, the most important thing is, to be honest. If you only hope to win, have a shot, think more irons in the fire are a good thing, you are setting yourself up for failure.
Use your scarce and expensive resources optimally by only bidding for the right opportunities. When it comes to making bid decisions, less really is more.